Mon, 01 Mar 2021

Fears about state of U.S. economy weigh on Wall St

Lola Evans
19 Jan 2021, 07:11 GMT+10

NEW YORK, New York - According to futures trading, U.S. stocks are likely to sink further when they re-open on Tuesday after the Martin Luther King public holiday. Reality is starting to seep in that the economy is not in the condition that markets have been reflecting these past 9 months, which has seen major indices hit record highs on several occasions.

"Until now. This past week-with the market looking ahead to the inauguration and what might be in store following the Capitol riots and Donald Trump's second impeachment - was a terrible one for economic data. Whether it was small-business confidence, consumer inflation, or just about anything else, the numbers painted a picture of an economy that was slowing more rapidly than expected. Initial jobless claims, which spiked to their highest level since August, and retail sales, which fell 0.7%, were particularly frightening," MarketWatch said in a report published on Monday.

The U.S. dollar was decidedly mixed on Monday. The euro fell to 1.2079. The British pound however held its ground at 1.3583. The Japanese yen inched up to 103.68, while the Swiss franc was a fraction higher at 0.8908.

The Canadian dollar strengthened to 1.2746, the Australian dollar was unchanged at 0.7685, while the New Zealand dollar declined to 0.7114.

Stocks rose in Europe but dipped in the United Kingdom. The Dax in Germany was ahead 0.44 percent at the close Monday. In Paris, the CAC 40 climbed 0.10 percent.

London's FTSE 100 conversely was down 0.22 percent.

On Asian markets, stocks in mainland China and Hong Kong advanced on Monday on news that the world's second-largest economy had powered up in the fourth quarter.

China's gross domestic product (GDP) rose 6.5 percent in the 4th quarter, compared to a year ago. Analysts had predicted the figure would be 6.1 percent.

The Hang Seng in Hong Kong advanced 288.91 points or 1.01 percent to 28,862.77.

China's Shanghai Composite gained 29.85 points or 0.84 percent to 3,596.22.

Elsewhere in the region, the solid economic data out of China was shrugged off by other markets. The Australian All Ordinaries lost 57.40 points or 0.82 percent to 6,929.40.

In Japan, the Nikkei 225 shed 276.97 points or 0.97 percent to 26,242.21.

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